Buying a house under value

samko123

Hi,

My girlfriend and I are currently privately renting a house owned by her parents. The long term plan is to buy the house from them and we are currently saving to do so. Her parents have said that they could possibly sell to us under the market value. If her parents agreed to sell to us at 95% of the market value and we were to approach a lender that would under normal circumstances approve us for a 95% LTV mortgage, would they consider this the same as having a 5% deposit? Or, is there anything else we can do in this scenario? We would not be expected to pay back the difference to her parents, this is in effect a gift.

We would like to get on the property ladder as quickly as possible. Her parents aren't able to help us out by giving us cash to use as a deposit, but this seems comparaible. Am I missing anything?

Any help appreciated.

Thanks

kingstreet

Yes. Some lenders accept such a concessionary purchase, although they'd usually expect more than a 5% discount for the deposit and the property must value up, so inflating the price trying to be clever is a non-starter.

Brock_and_Roll

The piece of the jigsaw that you are missing is that banks will lend 95% of the sale price or the valuation WHICHEVER IS THE LOWER.


So this idea will not work out. What is the hurry to get on the ladder considering you are renting off relatives? If prices rise, the family still benefits and in the meantime you can save up a deposit.

mrshughes86

I have this sort of mortgage with Halifax, after buying the property I rented at a discounted price - although they require a minimum of a 10% discount.